Across the globe, an unprecedented number of voters are gearing up to cast their vote. Overall, around 49 percent of the world's population are poised to shape the course of future events by placing an “x” or check market next to their preferred representatives.
In Taiwan, the pro-Democracy candidate emerged victorious, unsettling the ruling Chinese Communist Party. Meanwhile, political transitions are underway globally, including challenges faced by the U.K.'s Conservative Party due to a weaker-than-expected economic outlook, possibly paving the way for the opposition Labour Party in the 2024 general election.
A critical factor is the impending U.S. presidential race in November, where the possibility of former President Donald Trump securing a second term is being labeled as "the biggest danger to the world" in 2024, according to recent commentary from The Economist. While such statements only reflect some observers’ viewpoints, they do raise questions about the potential impact of a Trump presidency on the price of gold.
Question: How might a Donald Trump presidency influence the price of gold? To explore this, let's examine gold trends during the past five conservative and liberal American presidencies.
Gold Trends by U.S. President
The following chart illustrates the percentage gain or loss in the price of gold over the course of the past five U.S. presidencies. The vertical axis is the percentage change in the price of gold from the start of the presidency. The horizontal axis representing the number of months into a given presidency.
Interestingly, current U.S. President Biden has witnessed the smallest increase in gold prices at this point in his term, with a modest 8.9% rise over his first 37 months in the White House. In contrast, former President Trump, Biden's predecessor, experienced a significant 30.9% increase in the price of gold during the length of time.
Even more intriguingly, neither Trump nor Biden recorded the highest gold price gains at this stage in their presidency. Former President Barack Obama holds that distinction, with a remarkable 92.9% surge in gold prices over his initial 37 months in office. Following far behind is President Bush, with a 55.8% increase during his first 37 months. Interestingly, the weakest change in the price of gold over their presidency was former President Clinton, who saw the price of gold drop by 17.5 percent over his 96 months in office.
What can we infer from these trends regarding the future price of gold? If history is any indicator, a potential return of former President Trump to the White House might signal a gold price appreciation approximately four times faster than another four years of President Biden. The correlation between political shifts and gold prices adds an intriguing layer to the global economic landscape.